VietNamNet Bridge - Investors are showing their interest again in seaports, as shown by purchase of shares at recent IPO of Nghe Tinh Port.

Nearly 3.9 million shares sold on the last day of 2014, which was regarded as a big surprise even to the seller, the Vietnam Shipping Lines Corporation (Vinalines).

Up to 47 investors registered to purchase a total of over 8.57 million shares, 2.2 times higher than the number of shares offered.

Closing the session, 100% of shares were sold to nine investors, earning VND47.2 billion ($2.4 million).

"Nghe Tinh Port is the first seaport under the management of Vinalines that sold out 100% of the shares," said a Vinalines official.

Previously, five other ports of Vinalines organized IPO (initial public offering) in mid-2014. Quang Ninh Port sold only 7.5% of the shares and the port of Nha Trang sold 6.3%, earning a mere VND3.5 billion ($170,000). The two largest ports in Central and Northern Vietnam – Da Nang and Hai Phong – sold 19.6% and 47% of shares. Worse, Can Tho Port sold only 0.2% of the offered value.

The aforementioned ports had a long list of domestic and foreign investors who want to become strategic partners.

For the port of Nha Trang, after nearly a half year of negotiations, Vinalines is completing the final procedures for transfer of the exploration rights to a private corporation. Similarly, for the Quang Ninh port, a source said the strategic partner of the port may be a leading a group of financial investors.

Most notably, the port of Hai Phong has a list of expected strategic investors including foreign investment funds and domestic credit institutions.

The first is the Industrial and Commercial Bank of Vietnam (Vietinbank). This bank wants to become a major shareholder of the largest port in the North by deducting huge debt of hundreds of millions of US dollars of Vinalines.

Meanwhile, Vinalines was allowed by the government to sell a maximum of 30% stake in the Hai Phong port for a partner from Oman.

"With the agreed price that is not lower than the average auction price of VND13,500/share, the income from selling approximately 30% of shares may reach a thousand billion dong. This is significant resources for Vinalines’ financial restructuring," a Vinalines official said.

An official from the Vietnam Maritime Administration said the move originates from the policy to withdraw state capital from seaport enterprises that the Government has just approved.

"According to the recently adjusted policy, the state capital in the ports of Hai Phong and Quang Ninh will drop from 75% to 51%. This factor has made investors change their perspective," said Director Nguyen Nhat of the Vietnam Maritime Administration.

The Vinalines official added that also thanks to this policy, some big partners had asked Vinalines to sell more shares of the Da Nang Port. The second share auction is scheduled on January 19.

Mai Nguyen